NYSE Euronext (NYSE: NYX) will pay $250 million in Qatar's Doha stock exchange, the Doha Securities Market (DSM), in return for a 25% stake. It makes sense for NYX to expand into the Middle East as that region is becoming more financially influential.
Nokia (NYSE: NOK) is paying $410 million to buy out the rest of Symbian, a maker of operating systems for mobile phones. This move, announced just as Google (NASDAQ: GOOG) said its Android system will be delayed, could help Nokia as it becomes more entrenched in the marketplace. While Microsoft's (NASDAQ: MSFT) Windows Mobile operating system is Symbian's closest rivals, its still new kid Apple Inc. (NASDAQ: AAPL)'s iPhone that captures the interest of many.
United Airlines (NASDAQ: UAUA) said Monday it will cut about 950 pilot jobs out of its 6,600 pilots beginning this summer. The airline has already announced cutting 1,600 salaried positions and reduce its fleet. UAUA shares, already sliding nearly 15% Monday, continue to decline in premarket trading as airlines will likely stay in focus.
MOST NOTEWORTHY: Comcast, Time Warner Cable, YRC Worldwide and Syniverse were today's noteworthy upgrades:
Soleil upgraded shares of Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) to Buy from Hold on improving fundamentals, as they believe the economic stimulus package should drive consumer demand in 2H08.
Stephens upgraded shares of YRC Worldwide (NASDAQ: YRCW) to Overweight from Underweight as they believe management is making meaningful changes.
Syniverse (NYSE: SVR) was raised to Overweight from Neutral at JP Morgan. The firm upgraded shares based on accelerating organic growth from consumer wireless data usage.
OTHER UPGRADES:
Deutsche Bank upgraded NYSE Euronext (NYSE: NYX) to Buy from Hold.
After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $399.01 in March. This morning, CME opened at $487.00. So far today the stock has hit a low of $476.27 and a high of $487.65. As of 12:40, CME is trading at $481.03, down $8.32 (-1.7%). The chart for CME looks neutral but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $550 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in six and a half weeks as long as CME is below $550 at June expiration. CME would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.
MOST NOTEWORTHY: The Brokers and Asset Managers sector, Pacific Sunwear and Metabasis Therapeutics were today's noteworthy upgrades:
Goldman upgraded the Brokers and Asset Management sector to Attractive from Neutral as they believe an inflection point has been reached for stocks with minimal credit exposure, or where exposure is marked to market. Goldman expects the problem to shift to regional banks and specialty finance from brokers. As such, Goldman upgraded American Express (NYSE: AXP), Metlife (NYSE: MET), Bank of New York Mellon (NYSE: BK), Franklin Resources (NYSE: BEN), Janus Capital (NYSE: JNS) and NYSE Euronext (NYSE: NYX) to Buy from Neutral.
Wachovia upgraded Pacific Sunwear (NASDAQ: PSUN) to Outperform from Market Perform based on valuation, merchandising improvements, operating efficiencies, favorable product mix, and reductions in underperforming categories.
Rodman & Renshaw raised Metabasis (NASDAQ: MBRX) to Outperform from Market Perform on valuation given the potential for MB07803.
OTHER UPGRADES:
HSBC raised Novartis (NYSE: NVS) to Neutral from Underweight.
UBS (NYSE: UBS) was upgraded at Morgan Stanley to Equal Weight from Underweight.
Nike (NYSE: NKE) unveiled its Olympics 2008 line Monday, its largest effort for the games ever. Nike actually created products in every sport at the games despite not being an official sponsor of the games like its rival Adidas. As for the U.S. team, it will be attired in Polo Ralph Lauren (NYSE: RL) garb.
If Apple Inc. (NASDAQ: AAPL) was upgraded Monday, today it finds itself on the flip side with a downgrade from Morgan Keegan from Market Perform to Underperform. Ummmm, contrarian is one thing, but I'm not so sure about that one. AAPL shares are down nearly 1.5% in premarket trading.
Meanwhile, according to MarketWatch, Goldman Sachs has upgraded some brokers and asset managers, but is remaining cautious on regional banks, mortgage and specialty finance and REITs. American Express (NYSE: AXP), Metlife (NYSE: MET), Bank of New York Mellon (NYSE: BK), NYSE Euronext (NYSE: NYX) and several others all were upgraded to Buy. Wells Fargo (NYSE: WFC) and several others were cut to neutral.
MOST NOTEWORTHY: Cisco Systems, NYSE Euronext, Nasdaq and Cognicase were today's noteworthy initiations:
Friedman Billings believes Cisco Systems (NASDAQ: CSCO) is well-positioned to take advantage of "Business 2.0" applications and to gain share in a slower economic environment. The firm initiated shares with an Outperform rating and $31 target.
NYSE Euronext (NYSE: NYX) and Nasdaq (NASDAQ: NDAQ) were assumed with a Neutral rating and $72 target and $44 target, respectively, at UBS. The firm cited increasing competition and moderating volumes.
Deutsche Bank believes Cognicase (COGI) is one of the few carriers offering high-capacity commercial Internet access to enterprise customers at a discount to nearly all of its competitors. Shares were initiated with a Buy rating and $23 target.
OTHER INITIATIONS:
China Housing (OTCBB: CHLN) was initiated at Merriman with a Buy rating.
Goldman started Juniper (NASDAQ: JNPR) with a Market Perform rating and $27 target.
Suntrust initiated hhgregg (NYSE: HGG) with a Buy rating and $16 target.
Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.
WEB SITES:
Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.
NYSE Euronext, Inc. (NYSE: NYX) shares are rising on news that the company will purchase the American Stock Exchange for $260 million in stock. The deal will give a second U.S. license for an option exchange, and make it the nation's third-largest player in the $1.3 trillion options marketplace. An analyst at Jefferies & Co. said that the deal allows NYX both to increase its electronic trading business and remain in a traditional trading model, where it has excelled. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NYX.
After hitting a one-year high of $106.81 last January, the stock hit a one-year low of $64.26 in August. NYX opened this morning at $72.97. So far today the stock has hit a low of $72.66 and a high of $75.20. As of 10:35, NYX is trading at $72.44, up $3.35 (4.7%). The chart for NYX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just one month as long as NYX is above $55 at February expiration. The NYSE would have to fall by more than 25% before we would start to lose money.
NYX hasn't been below $64 at all in the past year and has shown support around $70 recently. This trade could be risky if the company's earnings (due out on 2/05) disappoint, but even if that happens, this position could be protected by the support the stock might find around $70 where it bottomed in the late summer.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in NYX.
Washington Mutual Inc. (NYSE: WM) reported a fourth quarter $1.87 billion loss, hurt badly by the sinking value of its mortgage portfolio. The quarterly loss was $2.19 per share, compared with a profit of $1.06 billion, or $1.10 per share in the same period last year. WaMu shares are up 2.3% in premarket trading.
Schlumberger (NYSE: SLB) said Friday profit rose 22% in the fourth quarter due to strong demand for oilfield services. The results were below Wall Street estimates and the shares are down over 3% in premarket trading. Earnings rose to $1.38 billion in the fourth quarter, or $1.12 per share, on revenue of $6.25 billion. Excluding a gain, the company's earnings rose to $1.37 billion, or $1.11 a share. Analysts polled by Thomson Financial had expected fourth-quarter earnings of $1.13 per share on revenue of $6.14 billion.
The exchange stocks have been hot issues in the past few quarters as investors have been betting on increased trading activity from hedge funds, higher volatility, and so on.
But just this week, exchange stocks have received a beating harder than the markets as a whole. I believe that if a snapback rally occurs next week, these stocks should bounce back harder than the overall market. Two particular exchange stocks have appealing charts: CME Group (NYSE: CME) and NYSE Euronext (NYSE: NYX). Both of these charts display similar characteristics, as you can see below:
This is the final review of the seven stocks I picked twelve months ago, and the time has passed quickly. This covers the period from December 28 2006 through December 27 2007. It has been a stock pickers year for sure given that the S&P 500 index moved up only modestly. Having come to this conclusion, I must admit my seven picks were all over the place. Three beat the indices, two performed sorely and two were basically break even except for the healthy dividends.
If the stock you happened to pick was Google, Inc. (NASDAQ: GOOG), which I included as sort of a "stalking horse" because of its popularity, it beat all else as a portfolio of one. As a matter of fact GOOG beat my picks by a whopping 930% meaning it bested my returns with very little effort with a gain 9.3 times the average of my seven stock picks.
The average of my seven picks fell dramatically in the last two months and I have gone from wonderboy with about a 22% YTD return, to waterboy with about 5.5% return -- UGH! I rode the Chinese market up and down, among the macro events.
Highlighting the fact that this year was suited to the stock pickers, James Cramer's average based on his nine picks beat all the indices by a healthy margin. Cramer, as you might imagine, had the most volatile picks. The two best Apple Inc. (NASDAQ: AAPL) and Savient Pharmaceuticals Inc. (NASDAQ: SVNT) did spectacularly well. Apple was appreciating most of the year while Savient saved Cramers tush by doubling in the last month due to approval of one of their drug therapies.
For the most part, this year has portrayed itself as a stock picker's market. If the stock you happened to pick was Google (NASDAQ: GOOG), which I included for fun because of its popularity, it beat all else as a portfolio of one.
The average of my seven picks fell as dramatically in November as it rose in October, reflecting the ebb and flow of the Chinese market. James Cramer's average based on his nine picks sank as well, but not as much. While Cramer managed to stay ahead of all the indices, and I beat the benchmark Standard & Poor's 500 and marginally beat the Dow Jones Industrial Average, I lost out to the NASDAQ and the average of the three.
Last month, after reporting spectacular gains, I remained realistic when posting "Of course, this could easily change given recent market volatility. A sharp downturn in the market could reverse our fortunes. A lot can happen in the remaining two months -- I take nothing for granted."
Yes, Google has done well, but Cramer's best, Apple (NASDAQ: AAPL) has done much better. It seems to be priced for perfection, as they say, but it also seems to be achieving it so far on the wings of the iPhone, iPod, and growing Mac sales. Warren Buffett voiced his opinion that the Chinese market has gotten bloated, and PetroChina ADR (NYSE: PTR), while still up significantly, dropped back off its all-time highs after becoming the second-largest capitalized company in the world.
After eBay Inc. (NASDAQ: EBAY) has pulled out of Japan a few years back due to Yahoo's domination there, today it announced a partnership with Yahoo Japan Corp., owned one third by Yahoo! Inc. (NASDAQ: YHOO). The two agreed to team up in online auctions, planning services for next year that will make it easier for consumers to buy things over the Internet from the U.S. and Japan and make cross-border bids and trading.
Trump Entertainment Resorts (NASDAQ: TRMP) announced yesterday its Chief Financial Officer Dale Black has resigned, effective Dec. 14, to take a similar position with another casino and entertainment company. TRMP shares declined in late trading, continued to slide in after hours and are now trading down over 14.6% in premarket action.
Today is the expiration date on the FCC's 180-day review period for the proposed purchase of XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) by Sirius Satellite Radio Inc. (NASDAQ: SIRI). Analysts thinks the purchase may not be approved by today. While some analysts are think that the FCC may yet approve the merger, the Justice Department may not act under the same time constraints. Consensus seems to be, though, that the review will slip past the 180-day period. A Cowen & Co. analyst warned shares of the two satellite radio companies may tumble if the deal is rejected, XM shares may drop between 20-30% and Sirius may decline about 20%. In premarket action SIRI shares are down 4.8% and XMSR shares down 8.4%.
New York Stock Exchange Chief Executive John Thain has been picked by Merrill Lynch & Co. (NYSE: MER) to be its next CEO, according to media reports.
The New York Post, which broke the story, writes "The move is a huge coup for Merrill and board member Alberto Cribiore, who has led the search for a new CEO after (Stan) O'Neal resigned on Oct. 30."
But Merrill's quick move is bad news for CItigroup Inc. (NYSE: C), which had wanted to hire Thain to replace its unpopular (and now ex) CEO Chuck Prince, the Post says.
The move is unexpected, according to the Wall Street Journal [subscription required], which said "insiders on Wall Street" had speculated that BlackRock Inc. CEO Larry Fink would get the job. CNBC is reporting that Fink was offered the job but turned it down.
Thain's departure from NYSE Euronext (NYSE: NYX) isn't a shock. He viewed the job, which he got after the departure of Richard Grasso, as a public service, according to the Journal. Shares of Merrill Lynch, down more than 35% this year, rallied on the news, rising $2.82, or 5%, to $59.75. NYSE Euonext and Citigroup were little changed.
The reshuffling of Wall Street's top management is far from over. Watch this space.
Before the bell: Futures lower on UPS warning, oil, ahead of Fed meeting,
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Washington Mutual Inc. (NYSE: 
New York Stock Exchange Chief Executive John Thain has been picked by 
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